Conman … Nicholas Levene was sentenced to 13 years in 2012 for defrauding clients via a £32million investment scam

He was being held at Spring Hill open prison near Aylesbury, Bucks, as he prepared for release halfway through his sentence.

But Levene was moved to a closed jail last month after staff raised the alarm.

A source said: “Officers couldn’t establish exactly what Levene had been up to but it was serious enough for him to switch to closed conditions.

“There were even fears he had managed to trade stocks and shares using prison computers or while on day release. It’s a major security concern.”

Ex-stockbroker Levene, of Barnet, North London, ripped off clients using a scam known as a Ponzi scheme in which new investors are lured into a seemingly flourishing business but their money just pays off earlier investors.

Experts said the dad of three was proven to have cost clients £32million but with interest and lost profits the real figure topped £100million.